The German health care market suffers of a lack of competition. This is the resolution of a long period of collective negotiations between a provider monopoly and statutory health insurance funds. To correct this market failure, the sector has undergone a series of reforms such as the initiation of managed care programmes. Even after more than ten years of managed care, however, such contracts continue to play a minor role in German health care. We identify an insufficient level of patient authority as a key reason for the failure of managed care. As an approach to solving this problem, we discuss a possible change to the legal framework that would give patients full control over payment flows in health care. We investigate the possible economic impact of this scenario.